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THE GOVERNMENT
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SOCIALIST REPUBLIC OF VIETNAM
Independence-Freedom-Happiness
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No.
95/2008/ND-CP
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Hanoi, August 25, 2008
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DECREE
ON
THE AMENDMENT, SUPPLEMENT OF SEVERAL ARTICLES OF THE DECREE NO. 16/2001/ND-CP
DATED 2 MAY 2001 ON THE ORGANISATION AND OPERATION OF FINANCE LEASING COMPANIES
IN VIETNAM
THE GOVERNMENT
- Pursuant to the Law on the Organisation of the Government dated 25
December 2001;
- Pursuant to the Law on the State Bank of Vietnam No. 01/1997/QH10 dated 12
December 1997 and the Law on the amendment, supplement of several articles of
the Law on the State Bank of Vietnam No. 10/2003/QH11 dated 17 June 2003;
- Pursuant to the Law on the Credit Institutions No. 02/1997/QH10 dated 12
December 1997 and the Law on the amendment, supplement of several articles of
the Law on the Credit Institutions No. 20/2004/QH11 dated 15 June 2004;
- Pursuant to the Law on Enterprises No. 60/2005/QH11 dated 29 November 2005;
- Upon the proposal of the Governor of the State Bank of Vietnam,
DECREES:
Article 1. To amend, supplement several articles of the Decree No.
16/2001/ND-CP dated 2 May 2001 of the Government on organization and operation
of finance leasing companies as follows:
1. To amend Article 2 as follows:
"Article 2.
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a. Limited liability finance
leasing company with 2 members and more;
b. One member limited liability
finance leasing company;
c. Joint stock finance leasing
company
2. The change of ownership,
transformation of the form (type) of the finance leasing company shall be
performed in accordance with applicable provisions of State Bank of
Vietnam."
2. To amend Article 3 as follows:
"Article 3.
1. Joint venture finance leasing
company is the finance leasing company established in Vietnam with capital
contributed by Vietnam party (which includes one or more Vietnamese credit
institutions, enterprises) and the foreign party (which includes one or more
foreign credit institutions) on the basis of a joint venture contract. The
joint venture finance leasing company shall be established in the form of a
limited liability company with 2 members and more.
2. 100% foreign owned finance
leasing company is the finance leasing company established in Vietnam with 100%
of charter capital owned by one or several foreign credit institutions. The
100% foreign owned finance leasing company shall be established in the form of
a limited liability company".
3. To amend Article 4 as follows:
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The assignment of contributed
capital amount by the parties to a joint venture finance leasing company, 100%
foreign owned finance leasing company shall be carried out in accordance with
provisions of applicable laws and the guidance of the State Bank of
Vietnam."
4. To supplement paragraphs 6, 7 and 8 to Article 7 as follows:
"6. Foreign credit
institutions include banks, finance companies, leasing companies which are
established under foreign laws. In case of a foreign leasing company, the
balance of financial lease and loan must account for at least 70% of its total
assets.
7. Home country for a foreign
credit institution shall be the country where it is established.
8. Subsidiary of a finance
leasing company
A company shall be considered as
the subsidiary of the finance leasing company if it satisfies one of following
cases:
a. It has over 50% of charter
capital or total issued common shares owned by the finance leasing company;
b. The appointment of majority
or all members of the Board of Directors and General Director (Director) of the
company is subject to the own decision made by the finance leasing company;
c. The amendment of, supplement
to the Charter of the organization and operation of the company is subject to
the own decision made by the finance leasing company."
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"b. Availability of
sufficient legal capital in accordance with provisions of the Government at the
time applying for the establishment of the finance leasing company."
6. To amend paragraph 2 of Article 8 as follows:
"2. Except for the
conditions stated in paragraph 1 of this Article, the foreign party to a
joint-venture finance leasing company or 100% foreign owned finance leasing
company must satisfy following conditions:
a. To be permitted to engage in
finance leasing activity in Vietnam by competent authority in accordance with
provisions of applicable laws of its home country.
b. Availability of over 10
billion US dollars of total assets by the end of the year prior to the
application time, unless otherwise provided for by the bilateral investment
Agreement entered into by and between Vietnam and its home country."
7. To replace Articles 13, 14 and 15 by new Articles 13, 14 and 15 as
follows:
"Article 13.
1. The opening of a branch,
domestic and overseas representative office of a finance leasing company must
be approved in writing by the State Bank of Vietnam. Conditions for application
file, procedures for the opening of the branch, representative office of the
finance leasing company shall be in accordance with Article 33 of the Law on
Credit Institutions, guidance of the State Bank of Vietnam and provisions of
current laws.
2. The establishment of a
subsidiary of a finance leasing company for engaging in some areas of finance,
banking, insurance shall be performed in accordance with the provisions of the
State Bank of Vietnam and current laws.
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1. Board of Directors
a. Function of the Board of
Directors is to manage finance leasing company, to make decision at its own
discretion on behalf of the finance leasing company, to perform rights and
obligations of the finance leasing company, except for issues subject to the
authority of Shareholders' General Assembly (for joint stock finance leasing
company) or of the owner (for one member limited liability finance leasing
company) or of capital contributors (for limited liability finance leasing
company with 2 members and more).
b. Board of Directors shall
consist of at least 3 members, including prestigious persons who possess
professional ethics, are knowledgeable about finance, banking activity.
Chairman and other members of Board of Directors shall not be entitled to
authorize any person who is not member of the Board of Directors to perform
their duties, authorities.
c. Term of Board of Directors
and its members shall be from 3 to 5 years in accordance with specific
provisions in the Charter of organization and operation of the finance leasing
company. Where a member of Board of Directors is additionally elected or
elected as substitute for a member who is dismissed, relieved from office in
the middle of his term, then the term of the additional or substitute member
shall be the remaining period of the Board's term. Member of Board of Directors
may be re-elected with unlimited number of terms and may be dismissed, relieved
from his office at any time upon the decision of the agency competent to elect,
appoint or nominate.
d. Board of Directors shall use
the seal of the finance leasing company for performing its duties.
2. Controllers Committee
a. Controllers Committee shall
be responsible for examining financial activity; supervising the compliance
with the accounting regime, prudential ratio in the operation of the finance
leasing company, performing the internal audit regime from time to time for
each sector in order to make accurate assessment for business activity and
financial situation of the finance leasing company.
b. Controllers Committee shall
consist of at least 3 persons, of which at least one person is Chief of the
Committee and at least a half of members of the Committee are specialized and
responsible Controllers. Controllers must satisfy requirements of professional
standard and professional ethics stipulated by the State Bank of Vietnam.
c. Controllers Committee has its
assistant body and is entitled to use the internal inspection and control
system of the finance leasing company to perform its duties.
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3. General Director (Director)
a. Board of Directors shall
appoint one of its members as General Director (Director) or outsource a
General Director (Director). General Director (Director) of the finance leasing
company shall be responsible to Board of Directors, to the law for the
management of daily activities based on his duties, authorities in line with
provisions of this Decree and other provisions of applicable laws. General
Director (Director) shall be legal representative of the finance leasing
company unless otherwise provided for in the Charter of the organization and
operation of the finance leasing company.
b. Term of General Director
(Director) shall not be in excess of 5 years as specifically stipulated in the
Charter of the organization and operation of the finance leasing company.
General Director (Director) may be reappointed with the unlimited number of
terms.
c. General Director (Director),
Deputy General Director (Deputy Director) of the Finance leasing company must
satisfy standards as provided for in paragraph 2, Article 39 of the Law on
Credit Institutions.
d. General Director (Director)
of the finance leasing company shall not be permitted to be General Director
(Director) or Chairman of Board of Directors of another credit institution,
except for case where that credit institution is a subsidiary of the finance
leasing company.
dd. Board of Directors shall
provide in details for the structure, functions, duties of the assistant body
to General Director (Director).
Article 15.
State Bank of Vietnam shall
provide specific guidance on functions, duties, authorities and mode of
election, appointment, dismissal, approval of members of Board of Directors, of
Controllers Committee and General Director (Director) of the finance leasing
company."
8. To amend point b, paragraph 1 of Article 16 as follows:
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9. To supplement paragraph 9 to Article 16 as follows:
"9. Finance leasing
company, of which charter capital is equal to the legal capital of a finance
company shall be entitled to engage in some of following operations in
accordance with the guidance of the State Bank of Vietnam"
a. To provide short term loan
for supplement of current capital for the lessee
b. To perform the factoring
activity for the lessee."
Article 2. Implementing provisions
1. This Decision shall be
effective after 15 days since its publication in the Official Gazette.
2. Ministers, Heads of
ministerial-level agencies, heads of Government's agencies, Chairman of
People's Committee in provinces, cities under the central Government's
management shall be responsible for the implementation of this Decree.
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